GenericAggie said:
BoydCrowder13 said:
Kenneth_2003 said:
Quote:

I know several folks that "knew a crash/recession was coming and sold off and went to cash in the "hold" part. They think they're brilliant savant's! But here today they've bought nothing and are still in cash.
The problem with timing the market, you have to be lucky TWICE. You've got to sell near the top AND but near the bottom. ABB, just always be buying, and have some opportunity cash to put into the dips in addition to your regular buys.
Tale as old as time
Here's the problem with the picture - you're assuming people have money just sitting around waiting to time a dip, which means that money isn't invested, making money. Sure, you can "get out" and wait but no one times that right either.
No, I 100% agree and realize that not everyone has "buy the dip" cash lying around. It's the absolute last bucket to fund.
ABB... Always be buying
1) Emergency fund -- deductibles covered, 3-6 months or whatever is your comfort level
2) 401(k) -- minimum for the employer match
3) Debts (not mortgage) paid off
4) Max out that 401(k) and the HSA for full tax benefits
5) Regular investments into your after tax brokerage accounts or personal IRA (Roth or traditional) if you're able.
THEN... if your situation leaves you fortunate enough you start to look at the "opportunity" cash. This is your "buy the dip" cash. This is the you run across a steal because someone is jammed up and needs to offload something in a hurry. I met a guy in the oil field once that kept a significant amount of cash on him for this purpose. He'd come across someone jammed up and buy a piece of equipment (running or not) off of them for well below what it was worth, but a good deal for them for "quick get me out of a jam" cash. He'd then fix it up and could take his time selling it for what it was truly worth. Same for flipping houses or any other venture.